FC Background, LLC v. Fritze

On
Appeal from the 14th Judicial District Court Dallas County,
Texas Trial Court Cause No. DC-16-14736

Before
Justices Lang, Evans, and Schenck

MEMORANDUM OPINION

DAVID
EVANS JUSTICE

FC
Background, LLC (FCB) appeals the trial court's denial of
its motion to compel arbitration on the claims its former
employee Lee Fritze filed against it. FCB asserts the trial
court erred in denying its motion because Fritze signed an
employment application that required arbitration of all
disputes that might arise out of the submission of the
application and his employment with the company. We conclude
the employment application containing the arbitration clause
was superseded by a later agreement between the parties that
did not provide for arbitration and instead explicitly
provided for litigation in court. Accordingly, we affirm the
trial court's order.

BACKGROUND

In
2012, Fritze signed an employment application with FCB that
stated in relevant part:

I HEREBY AGREE TO SUBMIT TO BINDING ARBITRATION ALL DISPUTES
AND CLAIMS ARISING OUT OF THE SUBMISSION OF THIS APPLICATION.
I FURTHER AGREE, IN THE EVENT THAT I AM HIRED BY THE COMPANY,
THAT ALL DISPUTES THAT CANNOT BE RESOLVED BY INFORMAL
INTERNAL RESOLUTION WHICH MIGHT ARISE OUT OF MY EMPLOYMENT
WITH THE COMPANY, WHETHER DURING OR AFTER THAT EMPLOYMENT,
WILL BE SUBMITTED TO BINDING ARBITRATION. I AGREE THAT SUCH
ARBITRATION SHALL BE CONDUCTED UNDER THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION. THIS APPLICATION CONTAINS
THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH REGARD TO
DISPUTE RESOLUTION, AND THERE ARE NO OTHER AGREEMENTS AS TO
DISPUTE RESOLUTION, EITHER ORAL OR IN WRITING.

FCB
formally hired Fritze as vice president of sales and
marketing in 2013. In 2015, the parties negotiated an
employment agreement for 2016 that required Fritze to execute
(1) an employment agreement dated December 28, 2015 setting
forth his compensation, benefits, and other items, and (2) a
non-compete agreement. Among other things, the non-compete
agreement incorporated by reference the December 28
employment agreement, generally set forth Fritze's
responsibilities as vice president of sales, addressed his
ability to bind the company, provided for the protection of
confidential information, and also provided the following:

Prior Agreements and Modifications. This Agreement expressly
supersedes an[y[1] previous written or oral agreements
between you and FCB relating to employment. It represents the
complete understanding between you and FCB and may only be
modified by written agreement signed by you and an owner of
FCB.

Neither
the non-compete agreement nor the December 28 employment
agreement that was incorporated by reference included an
arbitration clause. Instead, the non-compete agreement stated
as follows:

Applicable Law. Except as expressly stated to the contrary,
this document is to be governed under the laws of the State
of Texas. The Employee and the Company each submit to the
exclusive jurisdiction of any state or federal court sitting
in the State of Texas, in any action or proceeding arising
out of or relating to this Agreement and irrevocably waive
any objection to proceeding before such courts based upon
lack of personal jurisdiction of [sic] inconvenient forum.
The Company and the Employee irrevocably consent to the
service of process out of any of the aforementioned courts by
the mailing of copies thereof by registered or certified
mail, postage prepaid, to such party at the address stated in
the this [sic] Agreement under Notices.

Fritze
sued FCB in November 2016 alleging various claims arising
from FCB's termination of his employment in July 2016.
FCB filed a motion to stay proceedings and compel arbitration
pursuant to the clause in the application for employment
signed by Fritze. Fritze opposed the motion. At the hearing
on the motion to compel arbitration, the trial court stated
its reliance on the merger clause in the non-compete
agreement as superseding the arbitration clause in the
employment application. The trial court, however, did not
limit the bases of its order denying FCB's motion by
identifying in writing any ground or reason. This appeal
followed.

ANALYSIS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FCB
contends that the trial court erred in refusing to compel
arbitration under the clause in the employment application.
We review an order denying a motion to compel arbitration for
an abuse of discretion. See Carr v. Main Carr Dev.,
LLC, 337 S.W.3d 489, 494 (Tex. App.- Dallas 2011, pet.
denied). Under that standard, we review the trial court's
legal determination de ...

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